Legal Library: Cases and Proceedings

In September 2016, nutritional supplement marketer NutraClick agreed to settle FTC charges that it lured consumers with “free” samples of supplements and beauty products and then violated the law by charging them a recurring monthly fee without their consent. Four years later, in September 2020, the FTC filed a complaint alleging the company and its two principals were continuing to deceptively market their products, in violation of the FTC order. The settlement order, announced simultaneously with the complaint, bans the defendants from negative option marketing and requires them to pay more than $1 million for consumer redress. 

A Rhode Island company and its owner will be permanently prohibited from misrepresenting they are affiliated with the U.S. Small Business Administration (SBA) as part of a settlement resolving Federal Trade Commission charges they misled consumers in the early days of the coronavirus pandemic. Ponte Investments, LLC, and its owner John C. Ponte were charged by the FTC in April 2020 with misleading small businesses to think they had an affiliation with the SBA and could offer companies access to the coronavirus relief programs administered by the agency.

A Florida-based company that has promoted its Isoprex supplement to older adults as a miracle cure for pain and joint inflammation has agreed to a settlement with the FTC that bars the company from continuing to make its unproven claims. In September 2020, the FTC announced it was sending refunds totaling more than $76,000 to consumers who bought the deceptively marketed product.

At the FTC’s request, in May 2019 a U.S. district court in Florida granted summary judgment against two individuals, approved six settlement agreements involving 11 defendants, and entered a default judgment against the remaining seven defendants, officially ending the massive Pointbreak Media robocall scheme. In August 2020, the FTC returned more than $70,000 to consumers defrauded through the scheme.

Tri Star Energy, LLC, Hollingsworth Oil Company, Inc., C & H Properties, and Ronald L. Hollingsworth, which operate fuel outlets and convenience stores, agreed to settle FTC charges that Tri Star’s acquisition of retail outlets and related interests of Hollingsworth would violate antitrust law. The complaint alleges that the proposed acquisition would harm competition for both retail gasoline sales and retail diesel fuel sales in the two local markets of Whites Creek, Tennessee and Greenbrier, Tennessee. Under the proposed consent agreement, Tri Star would be required to divest to Cox Oil Company, Inc. retail fuel assets in Whites Creek and Greenbrier within 10 days after Tri Star completes the acquisition. On August 14, 2020, the Commission announced it had approved the final consent order in this matter.

The marketer of a scheme to make money on Amazon, and his companies, are banned from marketing and selling business opportunities and business coaching services under a settlement with the FTC. The settlement order against Jeffrey A. Gomez (aka Jeffrey Adams), Adams Consulting LLC, and Global Marketing Services L.L.C. also requires them to surrender funds and assets for consumer redress. In August 2020, the FTC returned more than $9.1 million to consumers defrauded through the scheme.

The Federal Trade Commission sued F & G International Group Holdings, LLC, FG International, LLC, and their principal J. Glenn Davis, alleging they make false or unsubstantiated R-value claims about their architectural coatings products. In July 2020, the FTC sued four companies that sell paint products used to coat buildings and homes, alleging that they deceived consumers about their products’ insulation and energy-savings capabilities. In complaints filed in federal court, the FTC charged that the companies falsely overstated the R-value ratings of the coatings, making deceptive statements about heat flow and insulating power.

Announced in June 2019 as part of a crackdown on illegal robocalls against operations around the country responsible for more than one billion calls, the FTC’s complaint against six corporate and three individual defendants jointly doing business as Second Choice Horizon and CSG Solutions, alleges Raymond Gonzalez, Carlos S. Guerrero, and Joshua Hernandez ran a maze of interrelated operations that used illegal robocalls to contact financially distressed consumers with offers of bogus credit card interest rate reduction services. The FTC contends many of the consumers targeted were seniors. In July 2020, the FTC announced the defendants had settled the Commission’s complaint, and are banned from telemarketing and selling debt relief services.

In December 2018, the operators of a student loan debt relief scheme agreed to pay approximately $1.3 million to settle Federal Trade Commission allegations that they pretended to be affiliated with the U.S. Department of Education or with consumers’ loan servicers, and tricked consumers into believing that illegal upfront fees were being used to pay off their student loans. In July 2020, the FTC announced it was mailing checks totaling more than $1 million to individuals who lost money to the scheme.

The operators of a work-from-home scheme and the CEO of their main affiliate marketing network agreed to pay nearly $1.5 million to settle Federal Trade Commission allegations that they used misleading spam emails to lure consumers into buying work-from-home services. 

The Federal Trade Commission took action to halt a scheme that allegedly deceived consumers with mailers supposedly directing them how to obtain federal COVID-19 stimulus benefits, which instead lured them to a used car sale.

The mailers sent by Traffic Jam Events, LLC and its owner, David J. Jeansonne II, were labeled “IMPORTANT COVID-19 STIMULUS DOCUMENTS” and directed consumers to “relief headquarters” to “claim these stimulus incentives,” the FTC alleged in its lawsuit against the company and Jeansonne.